Tuesday, July 31, 2007

No trading today, I'm guessing CEPH will jump up on earnings today. I could be wrong but it's been on the WSJ buy on weakness a few times over the last few trading days and has been getting beaten down pretty hard these last few days.

PFE has also been getting beat down hard, and the calls looks cheap, but then again they can get cheaper if PFE continues its downward trend.

Monday, July 30, 2007

Today was a battle, I really need to spend time on developing that trading system. This morning the A/D lines and market stats were messed up with IB, I was seeing 2400 stocks up on Nasdaq and -1 down,,,,wrong!!, NYSE A/D was 100-600 instead of 1.5,,,,,after about 30min things went back to normal. Watching Pivots levels on ZN was critical today, as ZN pierced through Fridays low and ES rallied to new highs.

What is Jim Cramer talking about,,margin hour,,, 2:45pm EST?

ER2 is now starting to perform better than YM, earlier today ER2 was getting weighed down. I noticed on the WSJ page that there was money inflows into IWM last Thursday and Friday. I also noticed KBH got an upgrade today, which was on the WSJ buying on weakness last Thursday. Also AXP was on the buy list, giving the DJI a good lift today. I'm seeing money going into Biotech, so watch for a possible bounce in the Bio's.

IYR is up for the day right now, and so is XLF, making me think that we may get a bounce the next couple days,,,We'll have to wait and see what happens with bonds though.

It's now 3pm EST and NYSE A/D has pretty much flat-lined along with the rest of the stock market.

Does anyone else see a volatility skew in FXI options? China just keeps going up almost everyday. I wonder what the correct valuation for that ETF is, because the money flow looks to be very strong.

Wednesday, July 25, 2007

I was up 2k, and then I lost it all shorting CL at the close. I added to a loser, because I'm a loser. I'm really sick of my trading habits. I thought I was going to map out a game plan a couple weeks ago, but what'ya know, same ol'dumbass mistakes, adding to losers and not having good stops in place. It was this time last year that my account took a beating. You think after CL ran up over 3 bucks it would retrace 20-30 cents, but noooooo,,,,,you just keep getting screwed into the close, what a dumbass mistake that was. All my hard work and profits washed out on that dumbass trade. I shorted at 75.90, around 2:30 EST for the close, thinking I could get a small scalp to get to $2,500 for the day,,,,,,nope, CL continues up another 40-50 cents after the close. Yeppe-me. I'm a dumbass, I barely eat all day, I stress out and yell and scream at myself in the car from a shitty trading day, say "don't add to losers",,"where is your stop", but then I say,,,what the heck, just one more contract,,,,,then bam, screwed as usual. YOU SUCK,,,you got that,,,I cannot say enough to express how I feel. On another note, I'm still up a large amount for the year, but nothing good has come the last 2 months, just shitty trading on my part, adding to losers and being a loser. No trading plan, planning to fail, losing all my profits on 1 stupid scalp,,,,,no stops,,,I'm done Venting. I'm going to the gym, hopefully I will feel some since of accomplishment from todays shittiness, I doubt it considering I have little energy from not eating all day. By the way, to all you fat people out there, a good way to lose weight is done by trading with too large of size, it works like this, the position goes against you and then you stress out and forget to eat, it's worked wonders for me, I don't even need to diet to look good for the BEACH. How you like that for healthy eating habits for traders,,,not sure if it as good as trader BUBS eating plan for traders,,,Yes, I read your blog dude. Alright, my eyes are hurting now from staring at these shitty CRT monitors all day,LATER TRADER!

I was thinking of going long 10 cards on ER2 at the open with a profit target of 3 pts tommorow, and then I can call it quits. Thoughts of a loser. Instead I think I'll sleep in, and go to work, and then turn on my computer when I get home and say, shit, I knew it was going to go up.

Tuesday, July 24, 2007

Screwed up by placing a 10 lot scalp long on ER2 before it made its treacherous descent. Let a 1k day turn into a fat loser. I'm absolutely disgusted with myself. Thinking I can get a small profit on a 10 lot and then I get kicked in the face. If I had stuck to the plan of using the correct position size, today could have been a great day. Instead I feel like quiting and I feel disgusted with myself. I told myself short only today, and somehow I screw myself over like always and go for scalp with a 10 lot. Trading is all about using the correct position size at all times. The one trade where I go for a 10 lot scalp I get absolutely crushed. IDIOT, IDIOT, IDIOT. WTF were you thinking. Never again.

Monday, July 23, 2007

I opened my charts 30min after the open, and for the 3 hours I traded, scaling in and out of positions while using a trailing stop worked good. I normally do bad on Mondays, so I'm pleased with todays performance. I missed a trade on CL because the risk looked a little too big for the contract size; however I should have instead bought USO to lower my risk and still have taken the trade.

PL= $1k on 46 contracts

Trade Summary-I'm not sure if it was my computer, internet connection or IB, but my fills on book trader topk 2-3 seconds to get filled when normally I get filled instantly, I'm guessing it's my internet connection considering I'm sharing a line with 2 other computers now.

I've been exploring platforms for option trading and for back-testing strategies. I liked Tradestation's Option analyzer, and I've been wanting to try out Tradestation for a long time to back-test some strategies, so I think I'm going to open an account with them. I'm testing out NinjaTrader right now. It's not as cool as I thought, and as of right now I like QT and IB book trader 10x more.

The Stocks for Home buidlers and real estate continue to trend down and China continues to trend up,,,,how long has this been going on for?

Keep an eye on the Aussie Dollar, Gold, and Crude oil

Friday, July 20, 2007

No charts today. I woke up 2 hours after the open, with the market down 160pts. I put on 2 scalp trades and now I'm headed off for work. Have a good weekend. I'm looking into getting Ninja Trader because the feature that helps you analyze your trades would be beneficial to me; helping me avoid trading blowups and find the trades that work the best for me.

PL= $125 on 4 contracts

In other news it looks like IB changed some things in TWS, I'll have to explore this later.

Thursday, July 19, 2007

I'm still working on my trading system.I'd like to have it setup with audible alerts that tell me when to enter.Wouldn't it be nice to know each stock that is hitting its bid/ask that is counted as apart of the NYSE A/D. I was reading TA of S&C; particularly the article on VPCI, and found that the indicator was worth checking out, however I don't think this indicator would be good for thinly traded small/mid cap stocks.

The trade experiment that I opened yesterday is unchanged, with a P/L $300

Wednesday, July 18, 2007

I'm expecting ER2 to outperform YM for the next week and to see some sector rotation.DIA calls should have been closed at the beginning of the week if you were smart about taking your profits with option expiration quickly approaching.

P/L= $1k on 57 contracts and 400 shares

Trade Summary-I traded 2 hours during the afternoon with objectives to look for short trades on YM and long scalps on ER2.

You would think I should have gone long 2 contracts on YM to equal 1 contract on ER2, but still, YM strongly outperformed ER2 this last month, while ER2 is breakeven/lower from where it was a month ago.

My strategy has now reversed and I will be reversing positions for the next few weeks to see how things work out.

Tuesday, July 17, 2007

I had a short position that I put on 15 min before the close on Monday on ER2, which put me negative $700 yesterday, I covered that position early this morning around 5am EST for a 2 day combined $100 profit. No trading for me today besides that.

P/L= $100 on 92 contracts traded.

I don't plan on putting on another trade until I have a trading system in place because I realize that if I don't have a trading system I will continue to have blow up days. So for the next few days I plan on outlining my trading system.

Friday, July 13, 2007

I read a thread on EliteTrader today that had me thinking of what I've done to prepare myself in avoiding another blowup trading day.I really haven't done much except that I've been trading smaller size and that I don't immediately start adding to a losing position the minute it goes against me. I have been giving my positions a little breathing room and averaging some of my small losing trades, but I still haven't been using my stops wisely. I had some major losses the last 2 months, and I need to avoid at all costs another blow up day, and in order to do that, I need to develop a more sound trading system.My ideas on avoiding blowup trading days-1.Set a max loss for the day (no more than what I average in a 2-3 trading days, maybe 1k)2.Use audible alerts that sound off when extreme situations are occurring, ie. advancing to declining issues is 3:1, "LONG ONLY, if your short COVER YOU DUMB ASS"3.Be apart of a trading chat room where you can talk with others, and they may be able to help you if you become a deer in the headlights.4.Having a trading system that will not average into a trade past a certain point (ie. no more than 2pts, Why would you want to average into a LOSING trade past that point, YOU LOSER)5.HAVE and KEEP a PLANNED OUT STOP ON EVERY TRADE, no more, "oh, it'll come back, I'll just add a little here and it'll go back down to my breakeven point"

Here is my trading blowup escape technique example-Based on how I trade I will say I can add to the position only 3 times, meaning if the trade started out as a 1 lot, I will not add more than 3 contracts to this losing trade. Also, the trade has to have a stop on it placed before the entry is made, for this example lets say I'm trading ER2 with a 1.4pt stop placed away from the initial entry. If the trade goes 1pt against my initial entry I'm already feeling like I screwed up, and at this point my brain starts to think, "this can't be right? I'll add to the position and it'll go back!", but then the trade goes another 1pt against you and you are now flat from having your stop hit. If we didn't have a plan in place we would be saying to ourselves, "this is totally out of wack, I'm loading up here now big time, this has got to go back now!,,,,,,,,,,We know what happens next,,,,Right?

What if scenarios-What if there is a bombing or something bad happens and the stock market freaks out, did you have in your stops ahead of time?This is the problem with US retail traders, we are not smart about trading, we may be good at certain times scalping short term moves, but we are for the most part never hedged in our positions the way a option traders would be with a calendar spread or a hedgefund would be with having bought VIX calls for protection.

So what? How about a strategy trading futures where you are long one contract like YM and short ER2. You know both trade similarly to each other, but sometimes during the year the big caps are better than the small/mid caps. So our strategy would be for the most part hedged by being long big caps and short small/midcaps because we see that year to date that big caps have outperformed the small/mid caps.So we will add to our YM position on down days and add to our ER2 position on up days, and over time we would assume that we are making money by one index outperforming another.

You can use this strategy on stocks and ETF's too, and the possibilities and profits are more likely to be greater IMO. For example you could check out the leading and lagging ETF's for the last 3-6 months and choose to use this strategy by buying the bullish ETF on weakness and Selling the bearish ETF on strength. Checkout the WSJ on their gauge of money flow into and out of stocks for a determinant of what stocks/ETF's this would be a good idea on.

For example you may have an idea to short IYR on strength and buy SMH on weakness, because you are bearish on housing on bullish on tech.

I traded the first 2 hours and did badly on ER2 today, although I made a small profit. ZN and ES are trading inversely, and ER2 and ES remain the more bearish indices, which I expect will continue until option expiration next week.

P/L= $305 on 26 contracts

Have a good weekend

Thursday, July 12, 2007

Well my trading results were similar to yesterdays performance in terms of profitability during the time I traded. I traded light today because I was skeptical of the extreme bullishness. For most the day I watched the NYSE A/D trade lower while YM kept pushing higher. I made about $600 during the first 2 hours and then struggled to make the next $100. I could have made $1k more if I had shorted ER2 instead of YM around 1am EST, after getting the intermarket relationship trade pattern between ZN and ES around 1am. I scaled into TLT too soon and took a loss on it, but watching it along with ZN helped me turn a losing trade on YM into a small winner.(Like I said , I should have shorted ER2 or ES, because they are more bearish right now over YM and NQ). ZN and CL really tanked pretty hard during the time that I traded. I guess I should have been trading CL and ZN and just rode the trend. Every extreme NYSE low tick was a buy signal on YM this morning up until about 1am(extremely bullish day-A/D was 4:1 or greater during periods of todays' trading). I guess I should have gone long off of the news I read yesterday about the record short interest in ES. I'm done for the day, I have other business to tend to. I may not be trading tomorrow because I have work early.

Wednesday, July 11, 2007

After the first hour I was up 1k, I then struggled for the next 2 hours to make the next 100 bucks. I went short on ER2 a little too soon, because ZN looked like it hit a bottom, I should have waited for the double bottom on ZN and double top on ER2 (intermarket relationship strategy), or at least scaled into the trade slower. ES was the better short, showing bearish divergence, and if you haven't read already, there is suppose to be record short interest in ES right now,(is this bullish?), I think I read it on between the hedges blog.

July 11 P/L= $1,143 on 64 contracts

Tuesday, July 10, 2007

Trade Summary-Traded the first 2 hours, Choppy morning, Crude Oil had some good action. Market looks like its chopping before Bernanke speech. Pretty good day. I got a good winner early on, and the confidence and morning profit helped push me to take more. I noticed a little bit of inverse trading between ZN and ES, which I notice tends to happen whenever the word Bernanke is mentioned, also CAD had interest rates increased, which is why I think the market gapped down this morning, I don't think HD's earning had that big of an impact like CNBC says.

Thursday, July 05, 2007

Only traded for a little bit, got other stuff to do today. Light volume choppy morning. ZN has been trending down since 7am. I wonder if hedge funds loaded up on puts as protection before July 4th , and if they will push the market down today to get the puts back to breakeven.

Monday, July 02, 2007

I could only trade the first hour and a half and had problems with my computer freezing this morning. Volume is light and the inverse relationship between bonds and equities looks to have disappeared. My goal is to trade small and use stops to prevent another blowup.